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Google's thin-client Chromebooks have caused Microsoft to reshuffle its product lineup. On Monday, Microsoft said that it will be releasing a new line of $199 laptops for this year's holiday season.

The HP Stream laptop was announced by Microsoft COO Kevin Turner at the company's Worldwide Partner Conference currently taking place in Washington, D.C. Turner touted the Stream's "great value proposition against Chromebooks," and added that the company is "not ceding the market to anyone."

He also said that 7- and 8-inch Windows tablets will eventually be unveiled by HP that cost only $99, but it's not yet clear if these will be regular Windows or Windows RT. Microsoft said several months ago that it will be offering the Windows operating system for free for devices of nine inches or less.

$249 Toshiba and Acer Laptops

At the $199 price level, the new Windows laptops would compete with the $199 to $249 price points for the cheapest Chromebooks, which store all applications and data in the cloud. Chromebooks have rapidly been establishing market share in large organizations, such as enterprises and schools, where the low maintenance requirements and centralized security appeal to the IT departments.

The company didn't detail any of the specs of the new laptop. However, Turner also noted that $249 machines will be coming from Toshiba and Acer. Acer's laptop will have a 15.6-inch screen and Toshiba's will have a 11.6-inch.

While the $199 price may be appealing to those same IT departments in large organizations, the Chromebook's Net-oriented advantage remains. On the other hand, Windows' advantage is obviously that it is compatible with the vast library of applications and documents those organizations have already acquired. However, the pending issue is whether the $199 machine will have enough horsepower and other resources to adequately support at least the most commonly used applications.

In a report released Monday, industry research firm The NPD Group said that sales of Chromebooks had increased 250 percent for the first five months of this year, compared to 2013, and that they constituted more than a third of all channel notebook sales. In fact, for the three weeks ending June 7, Chromebooks' share of commercial channel sales exceeded 40 percent.

Stephen Baker, VP of industry analysis for The NPD Group, said in a statement that Chromebooks' "strength ahead of this year's education buying season shows how it has become a legitimate third platform alongside Windows and Mac OS X and iOS." He added that the next test for the platform "will clearly be the most difficult, as both Apple and Microsoft get more aggressive in pricing and deal-making over the next few months."

Laura DiDio, an analyst with industry research firm Information Technology Intelligence Corp., told us that pricing can make a big difference as to which platform consumers or businesses choose.

"Everybody's first loyalty -- whether consumers or businesses -- is to their wallet, not the brand," she said.

DiDio also pointed out that the Stream represents "huge news" for HP, since it "helps get them back into the laptop game."